Take Five #002: Entrepreneurship is hard, but this even harder
Five takeaways we loved at Kumo this week
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Take Five #002: Entrepreneurship is hard, but this even harder
1. New to search? Start here:
2. How one man’s net worth went from 11M to 25M this past year:
A fuller picture at a year in a HoldCo operator’s life, with both big wins:
Acquisition #5 - Flooring company in southern US. Post close on this deal has been a wild ride. Cash did indeed crash (as expected) through November-> February from 2m to 200k, but now is cruising back up towards 2m.
The team there is SO aggressive and motivated to show that they can run the business even better now that the old owner is gone. They are lighting that market on fire. I would not be surprised to see them book a 45-50m year with 4m ebitda. As always, the first 90-120 days is an adventure to see what you REALLY have with a business...this one is a gold mine. As always...its a reflection of a really strong leadership team. We had no idea how strong this team was.
And big losses:
Business #3 - House painting company in midwest US - Dead. Possibly with more effort over a few years we could have turned it around, but with limited upside, and the rest of our companies being over 10m in revenue, we decided to cut bait. Sold to the GM for $1.
Important lessons learned:
Never buy a franchise. They crush your ability to make a profit, and restrict your ability to make changes.
Small businesses are squishy. Buy bigger when you can...they are much more durable.
Failure is part of the game. And a reminder that we are not geniuses.
From Reddit /r/FATFire: An Entrepreneurial FATFire Update, Part Two | Part One
3. A deal that fell through, through the seller’s lens:
Great learnings from the team at ScrapingBee on what it’s like to be on the seller’s side of a deal that ultimately didn’t work out:
But since it was not the first time they sent us a message like that, there was hope.
Kevin takes the call as he was their primary point of touch.
1 hour later my phone rings, it's Kevin.
"The deal is off."
4. The best advice for a first time CEO:
#7:
There Are Only a Handful Of Great Co-Founders and VPs. Go All-In on Them. You will interview 100s and then 1000s of folks over your career, and hire many very good, pretty good, OK and less-than-great folks. But just a handful will truly be able to move the needle for you. Go all-in.
Let their weaknesses go, and backfill them. Support them when they make mistakes. Let them grow and hire and scale as far as humanly possible. Only a few will truly make a huge difference. Hire them immediately, over-compensate them with equity, appreciate them … and most importantly, get out of their way. Let them run.
Jason Lemkin’s “List of the best golden advice I was given as a first-time — and second-time — CEO”
5. A quick reassessment: what kind of work is “hard”?
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